Shares of Ubs Jump After News That a Shareholder Owns a Stake and Believes It Should Be Worth as Much as Morgan Stanley

Swiss multinational investment bank UBS AG experienced a surge in its stock value on Tuesday, following the revelation that Swedish activist investor Cevian Capital had acquired a substantial €1.2 billion ($1.31 billion) stake, expressing optimism that the shares had the potential to double in value.

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Cevian Capital, known for its constructive activist approach and established in 2002, declared that the acquired stake accounts for 1.3% of UBS's ownership, securing a position among the top 10 major shareholders. In a statement, Lars Förberg, Managing Partner and Co-founder of Cevian Capital, commended UBS's board and management for their commendable efforts in integrating Credit Suisse. He conveyed the firm's admiration for UBS's commitment to further enhance its operations.

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As a result of this investment, the U.S.-listed UBS shares experienced a 4.54% increase, while the Zurich-listed shares rose by 3.23% on Tuesday. This uptick in stock value contributed to a remarkable 50% increase throughout the year, marking UBS's most substantial annual return since 1997.

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The positive trajectory of UBS's stock has been particularly pronounced in the latter part of 2023, fueled by its acquisition of rival Credit Suisse. The latter had faced a downturn earlier in the year due to the departure of affluent clients amidst a global banking crisis. Förberg highlighted the strengthened position of UBS post-acquisition, solidifying its status as the largest global wealth manager with distinctive market positions and financial robustness.

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Förberg further articulated the belief that UBS's stock could witness significant appreciation if it closed the valuation gap with U.S.-based Morgan Stanley, currently valued at 2 times the price to tangible book. According to his assessment, reaching this benchmark would position UBS's stock at 50 francs per share, nearly doubling its current market value.

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In a televised interview with Bloomberg TV on Tuesday, Förberg reiterated Cevian Capital's commitment to being an engaged owner, emphasizing their focus not only on ongoing integration processes but also on the strategic developments that would follow. UBS, however, chose not to comment on Cevian Capital's investment.

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The timing of this significant investment announcement coincided with the release of a report by the Swiss regulator Finma on the lessons learned from the Credit Suisse crisis. Simultaneously, the Wall Street Journal published an article detailing UBS's aspirations to secure the position of the sixth-largest investment bank in the U.S., further adding to the dynamic landscape surrounding UBS and its market presence.